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ASIAN stocks slumped on Thursday after weak US manufacturing data and record oil prices renewed fears that the world's top economy was heading into recession, sending investors towards the safety of gold.
US crude oil futures eased in Asia after briefly touching a record us$100 a barrel on Wednesday, while gold steadied below an all-time high of us$861 an ounce hit in the previous session.
Asian companies face the prospect of higher energy costs just as data on Wednesday showed a key US manufacturing index shrank in December for the first time in nearly a year, darkening the outlook for Asia's top export market.
'People are showing concern about the overall global growth outlook. Oil is an underlying cost that a lot of companies face,' said White Funds Management portfolio manager Angus Gluskie.
'It also represents an increase in inflation that central banks around the world will have to deal with.' Some analysts are even voicing the fears of US stagflation as minutes from the latest Federal Reserve meeting shows it grappling with a credit crunch that may require more interest rate cuts to prevent worsening an economic slowdown.
The Fed has cut rates by 100 basis points since September, with its latest action on Dec 11 when it eased by a quarter percentage point to 4.25 per cent.
SINGAPORE
Singapore share prices ended the early session 1.53 per cent lower on Thursday after world oil prices briefly touched US$100 (S$139) a barrel, dealers said.
At the mid-day break, the main Straits Times Index was down 53.06 points at 3,408.16.
Volume totalled 800 million shares worth S$746 million in a market with 484 falling issues, 136 risers and 1,076 unchanged.
SHANGHAI
The benchmark Shanghai Composite Index, which covers both A and B shares, ended the morning down 33.81 points or 0.64 per cent at 5,239.01.
The Shanghai A-share Index fell 35.69 points or 0.64 per cent to 5,497.57, while the Shenzhen A-share Index rose 9.36 points or 0.60 per cent to 1,557.34.
HONG KONG
Hong Kong share prices opened 1.90 per cent lower on Thursday, following Wall Street's decline overnight and a spike in oil prices, dealers said.
They said the surging oil prices and a weaker-than-expected reading on the US manufacturing sector sparked fears the economy could be slowing at a quicker pace than most investors had anticipated.
The Hang Seng index opened down 510.49 points at 27,050.03.
KUALA LUMPUR
The Kuala Lumpur Composite Index (KLCI) fell 3.37 points to 1,432.32 at midday.
TOKYO
Japanese markets are closed for a holiday. -- AFP
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